Retention Money
Retention money is a percentage of contractor payment withheld until project completion and defect rectification period expires, ensuring quality and compliance.
| Retention Structure | Standard Terms |
| Retention percentage | 5% to 10% of contract value |
| Practical completion release | 50% of retention |
| Defects liability period | 12 months typical |
| Final release | After defects period, all issues resolved |
| Bank guarantee alternative | Contractor provides guarantee instead |
| Interest on retention | Not typically paid to contractor |
| Application Context | Usage |
| Construction contracts | Standard practice |
| Fit-out work | 5% retention common |
| MEP installations | 10% retention typical |
| Landscaping | 5% retention |
| Small repairs (under AED 50,000) | Retention often waived |
| Payment milestones | Retention calculated on each payment |
Related Terms
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